Peter Ngwebo* is leaning on his Suzuki motorbike, while he’s waiting for me to collect my food. He is calm, his black skin shimmering in the sun. He’s wearing black trousers and a black-and white-striped shirt. His attire resembles employees who work in corporate South Africa.
But his untucked shirt and his workman’s boots dismiss this notion. Ngwebo delivers orders for Uber Eats. He tells me he owns his motorbike and, because of that, the money he makes through Uber Eats is all his own. Ngwebo is but a small cog in what is now a massive online food-delivery business.
In recent months, we have seen leading titans slug it out to own this multibillion-dollar market. Prosus entered the battle in October 2019 when soon after it was spun out from parent Naspers in September that year, it gave an initial notice that it was prepared to pay £4.9-billion (about R92-billion) to acquire popular United Kingdom food-delivery business Just Eat.
The Just Eat Group, founded in 2001, an online and mobile food ordering company, connecting more than 27-million consumers with more than 107 000 restaurant across the UK, several European countries, Australia, New Zealand, Canada, Mexico and Brazil.
In 2018, Just Eat delivered £4.2-billion worth of orders for its restaurant partners, with an average of 2 107 orders per restaurant.
At the time Prosus made its offer, Just Eat had been working on a merger with Dutch food delivery company Takeaway.com, which offers its services across Europe, as well as in Israel.
Takeaway.com had been working to join forces with Just Eat since July, making an offer of £4.8-billion. The deal was set to create one of the world’s biggest food delivery companies.
Prosus attempted to stop the merger by putting forward its own offer of £4.9-billion, which was later increased to £5.1-billion.
The move was not backed by Just Eat, which asked its shareholders to reject the Prosus offer.
Forbes reported in September 9, that the online food delivery market is set to supersize to a hefty $200-billion by 2025.
Prosus wants in on the action. “In terms of opportunity, the food space is very, very large. It’s probably the largest opportunity I’ve run into in my lifetime,” Prosus chief executive Bob van Dijk was quoted as saying in Business Day in November. Van Dijk was speaking about Prosus’s proposal to acquire Just Eat.
In the same article, Business Day reported that Just Eat would be a key piece in building Prosus’s takeout empire.
Its food-delivery acquisition spree began in 2013 with an investment of about R30-million in Brazil’s iFood. Since 2016, it has invested about $2.8-billion in the sector. “The company also has holdings in India’s Swiggy and Germany’s Delivery Hero, but it doesn’t want to stop there,” Business Day reported.
Bloomberg reported earlier this week that Takeaway.com is due to declare victory in the battle over Just Eat. “Investors holding more than half of Just Eat stock have indicated they’ll agree to Takeaway’s all-stock bid, which values the company at about $7.8-billion, according to the people [Bloomberg sources].” Takeaway.com has given Just Eat shareholders until 1pm London time on 10 January 2020 to vote for their offer.
In August, US magazine The Atlantic quoted investment group Cowen and Company as saying that this year more than half of restaurant spending is projected to be “off premise” — in other words, not inside a restaurant. This means spending on deliveries, drive-throughs, and take-away meals will soon overtake dining inside restaurants.
“Off-premise spending will account for as much as 80% of the industry’s growth in the next five years,” the article said.
This is not surprising: consider the increasing number of people who rely on Uber Eats or Mr D to deliver their lunches or dinners.
Downstairs, close to my building’s entrance, Ngwebo insists that I come down to collect my order because he was afraid that his bike would be stolen in the heart of Johannesburg.
He tells me he has been an Uber Eats driver for two years and he started with his own bike. Four years ago Ngwebo started his own door, window and balcony installation business, but it did not work out because he needed more training.
“I fell along the way. I need more training, so I am busy with that right now,” he says.
Ngwebo says he’s based mostly in Sandton but goes wherever the orders take him. For each trip, he says he will make between R16 and R45, depending on the distance.
“They pay per kilometre: the farther you go, the more you earn. If the trip is short, you get less; if the trip is far, you get more,” Ngwebo says.
“There is no standard price of how much you can get per trip. It reflects on the app, but you get the money every Tuesday.”
After a six-day week of deliveries in the city and suburban areas surrounding it, Ngwebo makes between R2 500 and R3 500. But he explains that some of his colleagues who work seven days a week can make up to R4 000.
Ngwebo says as a Christian he would rather go to church on Sundays. He’s delighted with the fact that he owns his own bike, which allows him to attend Sunday services.
“It’s better to work for yourself because you can control your time. If you work for someone else, the person could want you to work all the time so that you can make more money for them,” he says.
Prosus’s parent company, Naspers, also has a footprint in the delivery business: Mr D Food, previously Mr Delivery, which competes with Uber Eats in South Africa.
Mr D Food has existed since 1992 and now its methods of doing business have adapted to fit in with the current times. Since becoming a subsidiary of Takealot.com in 2014, the company has been transformed into an online, mobile app delivery service. It takes thousands of orders a day through its mobile apps and website, boasts partnerships with more than 2 500 restaurants and delivers to more than 1 900 suburbs around the country.
Sanele Khumalo started driving for both Uber Eats and Mr D Food in October. “I do both. When the order comes from the other application, I close the other application and take the order,” he says.
Asked which application is the busiest, Khumalo says that it’s 50-50.
“I was a real estate agent — and I left it because I was paid little money. I was doing letting — and it was not giving me enough money,” Khumalo says. “I wanted money.”
At the time Khumalo was earning R6 500 a month including commission.
Khumalo says he did not make money because the location he was operating in was not busy and the apartment complex he was letting was not in good condition.
“I make more than I used to and no one is managing me,” he says.
Mr D Food told the Mail & Guardian that it currently has about 5 500 drivers delivering food for the company.
“South Africa stands to benefit from the growth of Mr D Food — as the culture of food delivery grows so too will employment opportunities and income for drivers,” said chief executive of Mr D Food Devin Sinclair – .
*Not his real name